HUD Handbook 4000.1 Part III.A.1 — Servicing of FHA-Insured Mortgages (Forward)

HUD Handbook 4000.1 Part III.A.1

III. SERVICING AND LOSS MITIGATION A. TITLE II INSURED HOUSING PROGRAMS FORWARD MORTGAGES This section provides the standards and procedures applicable to the servicing of all Single Family (one- to four-units) Mortgages insured under Title II of the National Housing Act, except for Home Equity Conversion Mortgages (HECM). The Mortgagee must fully comply with all of the following standards and procedures when servicing a Mortgage insured by the Federal Housing Administration (FHA). Only FHA-approved Mortgagees may service FHA-insured Mortgages. Mortgagees may service Mortgages they hold or that are held by other FHA-approved Mortgagees. a. Servicing Roles and Responsibilities (10/01/2025) The Mortgage Holder is the entity who holds title to the FHA-insured Mortgage and has the right to enforce the mortgage agreement. The Mortgage Servicer (Servicer) is the entity responsible for performing servicing actions on FHA-insured Mortgages on its behalf or on behalf of or at the direction of Mortgage Holders must ensure all FHA-insured Mortgages are serviced by a Servicer in accordance with FHA requirements and all applicable laws. Servicers must service all FHA-insured Mortgages in accordance with FHA requirements and all applicable laws. (A) Laws and Requirements Applicable to Mortgage Servicing [Text was deleted in this section.] Mortgagees must comply with all laws, rules, and requirements applicable to mortgage servicing, including full compliance with the applicable requirements under the purview of the Consumer Financial Protection Bureau (CFPB), including the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), and, if applicable, Ginnie Mae’s mortgage-backed securities requirements. (B) Contract Terms Where mortgage contract terms are more stringent or restrictive than those provided for in applicable law, the Mortgagee must comply with the mortgage contract terms. Mortgagees must comply with all antidiscrimination laws, rules, and requirements applicable to servicing performing FHA-insured Mortgages and FHA-insured Mortgages in Default, including full compliance with the applicable requirements of: • the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681a‒1681x; and Borrower’s income in a uniform manner that does not discriminate because of the race, color, religion, sex, age, national origin, familial status, disability, marital status, receipt of public assistance, because an applicant has in good faith exercised any right under the Consumer Credit Protection Act, or location of the Property. b. Responsibility for Servicing Actions (10/01/2025) Mortgage Holders are responsible for all servicing actions, including the acts of its Servicers. Servicers are responsible for their actions in servicing FHA-insured Mortgages, Partial Claim Subordinate Mortgages, and Payment Supplement Subordinate Mortgages. The Servicer is also responsible for actions taken at the direction, or on behalf, of the Mortgage Holder. The costs associated with subservicing may not be imposed on the Borrower or passed along to HUD in a claim for mortgage insurance benefits. i. Responsibility during Transfers of Servicing Rights The Transferor Servicing Mortgagee is the Mortgage Servicer that transfers servicing The Transferee Servicing Mortgagee is the Mortgage Servicer to which the servicing responsibilities have been transferred. The Transfer Date is the date on which the Borrower’s Mortgage Payment is first due to the Transferee Servicing Mortgagee. The Transferor Servicing Mortgagee remains responsible for the servicing of an FHA-insured Mortgage, any Payment Supplement(s), and any Partial Claim(s) before the Partial Claim documents have been recorded and delivered to HUD until the Transfer Date. The Transferor Servicing Mortgagee: • must verify that the change of legal rights to service has been reported accurately; and

Source: HUD Handbook 4000.1 III.A.1 — Servicing of FHA-Insured Mortgages · source URL · snapshot 3bf33edadcf6461d